Local Gold Market Sees Quick Pullback
Gold shoppers in Dubai enjoyed a brief window of relief on Monday as bullion prices fell by around Dh10 per gram, providing some respite after weeks of sharp gains. By 9:30am on March 9, the price of 24-carat gold had dropped to Dh613.25 per gram, down from Dh623.25 the day before. The widely popular 22-carat gold also slipped by nearly Dh10, settling at Dh567.75 per gram compared to Dh577.25 on Sunday.
Volatility Grips Gold Prices in the UAE
The recent drop comes after a period of striking price swings in the UAE gold market, driven by global uncertainties. At the start of February, 24K gold was trading near Dh598 per gram, gradually climbing above Dh610 by mid-month. The end of February saw prices surge to Dh636, and early March brought a brief high of Dh641 per gram—one of the year’s strongest levels. However, that rally fizzled as prices cooled, first to the Dh620 range, and then to current levels near Dh613.
A similar pattern played out with 22K gold, which began February at around Dh554 per gram, leapt above Dh580 by month’s end, and touched Dh593 in early March before sliding back below Dh570.
Global Factors: Stronger Dollar and Oil Prices
The decline in gold prices is largely attributed to a strengthening US dollar and growing expectations that interest rates could remain higher for longer. Recent signals from the Federal Reserve have reinforced this outlook, putting pressure on global bullion markets. At one point, international gold prices fell by about 3 percent before partially recovering.
Energy markets are adding to the volatility, as oil prices have surged toward $120 per barrel following production cuts by Gulf states amid ongoing regional tensions involving the US, Israel, and Iran. Rising oil prices can stoke inflation, which in turn may lead the Federal Reserve to keep borrowing costs elevated—a scenario that often weighs on gold, since it offers no interest income.
Long-Term Outlook: Gold Still a Safe Bet
Despite the latest pullback, gold remains up about 18 percent since the start of the year, buoyed by persistent geopolitical tensions and strong central bank buying. Analysts believe the current weakness may be short-lived, as gold continues to serve as a hedge during times of economic and political uncertainty.
